For Immediate Release
Office of the Press Secretary
October 14, 2008
Press Briefing by Press Secretary Dana Perino
James S. Brady Press Briefing Room
11:10 A.M. EDT
MS. PERINO: Hello, everybody. A couple of things, and then I'll get up to the economy and then take your questions. First of all, the President just left to attend briefings at the Pentagon. This is a routine visit for the President to go and sit with his team over there. There will be a meeting in the Tank and you can expect he'll hear about progress being made in defense transition.* I'm sure he'll talk about Afghanistan, Iraq and other issues that are upon us. But he's not expected to make any statements upon leaving there. At 2:45 p.m., we'll have the Detroit Red Wings here in the East Room.
And then this morning, as you know, the President met with his working group on financial markets. And then he announced that the Treasury would be making an announcement today to implement the tools, as they see fit, in regards to -- and actions also by the Federal Reserve and FDIC to help implement the rescue package that was passed.
The President announced that the Treasury will begin to purchase equity shares in financial institutions so they can return to making loans to businesses and consumers. That's one of the things we've said is the main problem in our economy right now. The Treasury Department will purchase these preferred shares on attractive terms that protect the taxpayer.
The FDIC will temporarily guarantee most new debt by insured banks, and also cover certain transition accounts -- I'm sorry -- transaction accounts used primarily by small businesses. These two steps will bring stability to all banks and help credit flow more freely. And the Federal Reserve will soon have its program in place to provide short-term financing for businesses and financial institutions.
These agencies are taking determined actions to strengthen our financial institutions and stabilize our markets. We have also been successful in working with our international partners in both the G7 and the G20 context to coordinate our actions. In fact, as the President emphasized, all the actions we and other nations are taking are consistent with the G7 plan for action announced by finance ministers and central bank governors just five days ago, on Friday afternoon.
As you know, President Bush has been in discussions with other leaders in the G7 in recent weeks. He met with Italian Prime Minister Silvio Berlusconi yesterday, and then this morning he spoke by phone to Prime Minister Brown, Chancellor Merkel, and President Sarkozy. This comes after the meetings yesterday, and the discussions regarded continued coordination efforts on the financial situation.
It will still take some time for all the actions we're taking to have their full impact. And you heard from the Treasury Secretary this morning, as well as Ben Bernanke and Sheila Bair, the Fed Reserve and the FDIC respectively. We want to get into the homestretch here of implementing this rescue package so that we can return stability to our financial markets.
Also, one scheduling update for you. Tomorrow President Bush will meet with his Cabinet at 9:00 a.m., and the subject will be the financial markets. I don't have -- I think that will probably just be pool in the Cabinet Room. I don't expect separate remarks, but I'll let you know as soon as we have more details on that.
Q The House Democrats think that more needs to be done in the way of an economic stimulus, and they're talking about as much as $300 billion. Does the President think that you need to give the economy another push with a stimulus?
MS. PERINO: Well, we'd like to see their details. What they have presented before couldn't pass the Congress itself, and it was not something that we thought would actually stimulate the economy and have an immediate impact. So if they want to provide some more details, we'll take a look at it. I think anything that they're talking about would not even be considered on the floor of the House until November 17th, so I don't know how urgent they necessarily think this is.
We think the best way to get the economy moving is to implement this plan that the Treasury Secretary laid out today. So we'll take a look at it. Our highest priority has to be right now the economic rescue package and the implementation, and getting it right so that we solve the problem in the credit markets and also protect the taxpayer at the same time.
Q Well, so the basic question of whatever the amount is, or the details, does the White House think there's a need for another economic stimulus?
MS. PERINO: I think that what we think is -- I think -- "I think what we think" -- what we think is that the rescue package that we have that Congress has passed about 10 days ago now that we're now ready to implement is the best way to get the economy moving again and get people back to work, and to start returning this country to job growth. A lot of their discussions yesterday, as I understood it, are not necessarily items that we think would stimulate the economy. Additional benefits to individuals who may need support during an economic downturn aren't necessarily stimulative.
So I think that we'll take a look at that. We've already -- from the administration's standpoint, we've increased the amount of food stamp availability. I think we did that back in May, during that time. We also have made sure that states get that LIHEAP money, the lighting and heating assistance money, earlier than usual, so that they can plan and make sure that the people who need it will get that right away. So I think that we need to look at the details very carefully about what they've proposed, and what the actual effects will be.
Q Well, what about the money that they've proposed to spend on infrastructure repairs?
MS. PERINO: It's interesting, infrastructure repair issues and all the transportation projects -- not just repairs, but these big projects -- the Treasury -- I'm sorry, not Treasury, I've been talking about them a lot -- the Transportation Department has said that really it's only about 24 percent of any project's money that is able even to go out in a first year. And that's if the project is already approved. And we know how long it takes to get projects approved with all the different permits.
We don't think that -- we don't necessarily think that the transportation funding would actually stimulate the economy, create jobs right away. There's a lot of skepticism to be had, and the Transportation Department has laid that out. And we did that as recently as August.
Q Even though there's not much argument that it's needed?
MS. PERINO: Well, I think that everybody in their districts thinks that their transportation projects are needed. One of the biggest problems we have with transportation bills is that you can prioritize all you want on the authorizing part of the ledger, but when it comes to appropriating the money, I can't remember the number, but the amount of earmarks that go towards transportation bills that actually don't go to the priority projects is a real problem.
Q Could you explain for Americans who are out there looking at what the President announced today and who might be a little bit confused and say, "well, okay, they've passed the economic rescue plan, so why do they -- why the shift to this? Does the administration not have faith that buying those failed mortgages is the best way to go? Are they scaling that back?" -- how would you explain to the average viewer why you're making this switch?
MS. PERINO: Well, I would ask certainly that you help me as well, because when you're talking to the American people, I think it's very important to remind them, yes, we got the rescue package. Part of the rescue package was making sure the Treasury Secretary would have flexibility to have the tools that he needed. And one of the tools that they talked about was certainly the purchasing of assets, but as was capital injection, among a few other things. What we said at that time -- and unbelievably, it was really only 10 days ago that all of this happened --
MS. PERINO: Was it 11? Of course Mark Knoller would know that. (Laughter.) I'm not even going to question it; I know he knows.
So what we said at the time was the Treasury Department is going to have to take a little bit of time, look at these balance sheets at the different institutions, figure out what's behind them, figure out how much they are worth, figure out what is the best way to spend taxpayer dollars efficiently so that we solve the problem and protect them at the same time. And the Treasury Secretary, over time, as over the past several weeks have developed, as the legislation got passed and the credit marks changed a little bit, and we saw that terrible drop in the stock market, it was determined that one of the tools that was in the rescue package -- capital injections -- was the best possible way to move forward at this point. So the Treasury Secretary announced that $250 billion of the $700 billion would go toward this capital injection.
I don't know how much would be used for asset purchases. That's still a part of the mix, and that's really -- the good thing about the rescue package is that we have this flexibility so that the experts can make sure they're making good decisions.
Q Was it really a need for speed that made this more of a focus versus the assets purchase, and that this can be done much more quickly?
MS. PERINO: I think -- I don't really know. I think that you can look at it in terms of what we were seeing in the stock market was a result of what was happening in the credit markets, which was a complete freeze. And none of the banks wanted to lend to one another. This capital injection should unthaw that so that the money can start moving again, and that way we'll be able to help all Americans up and down the economic food chain.
Q But the asset purchase program is just more scaled back than it --
MS. PERINO: Well, I don't know that they ever thought necessarily that the asset purchase program -- I don't think they ever knew exactly how much it would be. Now, granted, there were some people who, at the very beginning of this debate, thought that capital injection would be the best possible way to go, and they would not have done any asset purchases. What the Treasury Secretary said this morning is that the $250 billion will go towards capital injections. At some point, there will be some amount I'm assuming that will go towards asset purchases, but that takes a little bit more time, because you want to make sure that you know what you're buying and so that when you make that purchase, that you're able to protect the taxpayer and get a return on that investment.
Q Can I just follow?
MS. PERINO: No, I'm going to go to Jeremy.
Q There are some complaints coming from the manufacturing sector, the National Association for Manufacturers, in particular, that it's taking too long to help one of their key constituencies, the automakers; that these loans at Energy -- that it's very cumbersome to get these regulations drawn up -- or plans drawn up for extending them loans. Is there any effort by the White House to sort of speed that up, accelerate that in some way?
MS. PERINO: Again I would remind you, as Knoller reminded me, it has been 11 days since legislation passed the Congress. I know people are working as quickly as possible, and they're working with the manufacturing industry and the auto industry to provide the support they needed to get the regulations in place. The authorizing language was in there, but the rules of the road weren't laid out in detail. And that's what's happening now. But I'd have to refer you to the Energy Department for more on that.
Q And is there any sort of thought from the White House to sort of find another way to get aid to manufacturers like the automakers quicker -- more quickly, such as like opening that discount window to them?
MS. PERINO: Not that I'm aware of. One, I don't speak for the Fed, so I'd have to refer you to them to see if they are thinking about that. I'll leave all of that over there. But let me stress that we think that the best way to help everybody -- manufacturers, small business owners, consumers, retirees, those saving for college -- is to get these money markets moving again so that we can unfreeze the credit problem, get the lifeblood of our economy circulating again so that we can help everybody. And that's what we're determined to do.
Q Dana, a question about what you want the folks on Main Street to understand about what the President outlined today -- what's the central takeaway? And I have a follow.
MS. PERINO: Okay, thanks for the warning. (Laughter.) This is what the President wants everyone to know; that the government is determined to use the tools that it has at its disposal because of the rescue package to help save this economy. And we are working in a coordinated fashion with the G7 partners and the G20 to make sure that everything that we are doing will help prevent any problems from hurting any other countries -- because one thing that we've all learned from this is how interconnected all of us are.
So we're committed. We're going to use the tools; we're going to use bold and decisive action to make sure that we protect American taxpayers and we can get this economy moving again.
I'm sure that there are people out there who are very concerned -- retirees who have been watching with great interest, I'm sure, what's happened in the stock market, who are very concerned about their futures; baby boomers who are about to retire or want to retire in the next few years who are concerned about their futures. Then you have -- all up and down the economic food chain, as I've said -- you have students who are probably concerned about will they be able to get a job. And we believe that the best way to do this is to implement the rescue package. We're only 11 days from the signing of the bill. We'll continue to push for it, but we're moving as quickly as we possibly can. And the markets are responding.
Q Yes, they appear to be doing that. Let me ask you about the credit card ticking time bomb. A lot of people said that when the mortgage problems began, it was the trickle of default; then a growing, cascading avalanche of default. The problem of the credit card market now appears to be that we may be looking at something similar to that as the economy continues to teeter. I'm wondering, do you envision a large-scale bailout necessary for that marketplace, as well?
MS. PERINO: I don't know. I'd have to refer you to the Treasury Department, but I believe in the rescue package legislation that was passed, part of buying troubled assets would include credit market -- credit cards, I believe. So let me refer you over there for the specifics.
Outside of the current rescue package that we have, I don't know of anything else. We think that the plan that we have is big enough to work.
Q Can you talk about the conversations the President had with the other leaders this morning? And also, is there any sense that the U.S. was kind of in a way forced to do some of the things it did by the actions that the U.K. and other European governments did?
MS. PERINO: No, we -- remember, the President met with the G7 on Friday; this follows all of his staff and his team, Secretary Paulson and others talking with their counterparts in those countries. Then he met with the G20 on Saturday night. Then Europe moved forward with its plan. But we were coordinated.
It was important for us to be able to meet with those large institutions yesterday. The Secretary of the Treasury held that meeting over there at the Treasury Department because we needed to understand -- needed them to understand the plan, engage their willingness to participate in the plan; they all agreed to. And so it just took us a day to do that, but it was all well-coordinated amongst the other groups.
So what the President talked about today with those leaders is, one, thanked them for the coordination; two, talked about the importance of not letting up, but continuing to communicate and talk amongst one another. And then he saw obviously Silvio Berlusconi last night, had a good meeting. The Prime Minister will head back to Italy soon and then he'll be able to continue leadership on his behalf amongst Angela Merkel, Chancellor -- I'm sorry, yes, Chancellor Merkel, Prime Minister Gordon Brown. They're all moving in lockstep.
But the other thing that's important to remember is that each country is going to have individual problems. None of this coordination restricts activity by any one country. But the coordination helps us make sure that one action isn't inadvertently or advertently hurting another country.
Q Dana, can you give any estimate as to how long it will take for the plan to reach full impact? Both you and the President were vague, only saying it will take time.
MS. PERINO: I think that it will take time. And I will just have to refer you to the Secretary of the Treasury for that. For those of you who have covered Washington, 11 days is like a record in terms of how quickly we've moved to implement these rules. And we have to do so prudently to make sure that we protect the taxpayer, but we also get this right.
Q Are taxpayers really protected if the borrowing that Treasury will have to do to get the money to give to the banks is going to increase the deficit and the national debt, and taxpayers will have to pay interest on the money the government borrows?
MS. PERINO: Well, there's no doubt that the deficit is going to go up. We have said that, and you'll have more from Jim Nussle today at 4:00 p.m. when they announce their estimate. But the best way to protect all taxpayers and to deal with the deficit is to get this economy moving again and return to growth.
Over here -- Ann, and I'll work my way down.
Q According to some of those who were a part of the banking meeting yesterday, they were not all enthusiastic about signing off on this initially. In the President's dealings with banks, with the allies, with Congress, has he felt any impact related to his relatively low -- historic low job approval rating in the country? Has that had any impact, or been any disadvantage to him?
MS. PERINO: The President is focused on leading; he doesn't focus on the approval ratings. And yet -- I wasn't in the meetings yesterday, but I would imagine that there was probably some reluctance to move forward with this, but a willingness to do it, because everyone recognizes that we have to do it in order to protect everybody and to get this economy moving again.
So, sure, there's not a soul that wanted to have to do this. But if we're going to do it, we better do it right. And we better implement the legislation in a way that gets it done appropriately. This legislation got passed; this legislation is being implemented. The banks are going to participate in this program, and they have an incentive to get the government out of their business. We'll have a quarterly dividend that comes back to the American taxpayer at a 5 percent rate for the first three years. That jumps to 9 percent after those first three years. And so they have every incentive to work very hard to get their businesses back up to par, and return to normalcy.
Q Has the President felt any impact from the poll numbers that are out this week giving him a historically low job approval rating? It hasn't had any impact on his dealing with foreign leaders or with Congress?
MS. PERINO: Well, I think that if anybody who saw the statements yesterday by Prime Minister Berlusconi and others, all the conversations he's had, the United States is the one helping to provide the leadership necessary to steer this ship, so that we can all save our economies. That's what this President is focused on. He's not focused on the approval ratings as a lot of the media are.
Go ahead, Paula.
Q Some of this economic plan arguably is not to be stimulus, which --
MS. PERINO: Is what?
Q Some of it's not aimed to be stimulative, but basically to fill the time gap for people whose unemployment checks are running out, there are people who need food stamps. Even if you say the assistance of food stamps is based on the need for it, in May, times have changed, so --
MS. PERINO: But we make adjustments all the time. The Department of Agriculture would have more information. But we make adjustments, and there's reserves to be able to help increase if necessary.
Q But as you said, there will be time -- it will take time to trickle down to people at the bottom of the food chain. I think that's how you put it. So what is the alternative for them, particularly those who are running out of unemployment checks?
MS. PERINO: As I said Paula -- I think I've already answered your question. I answered your question last week. Tony Fratto answered it the week before. It's the same question every time. I'm not going to have a different answer for you. Congress is not here --
Q But this is about the economic plan.
MS. PERINO: Look, we have assistance that we have provided through LIHEAP, through food stamps, and there's unemployment benefits. But one of the things that we want to do is make sure that people return to work, and we're going to continue pushing for that.
Q In the President's conversations about directing injections into banks, was there anything in particular that put him over the top to support it?
MS. PERINO: Well, he trusts his team, and his team came in and told him that this is what we think that we need to do in order to get the economy moving. The markets responded favorably yesterday to that news and today, and the President thinks it was the right thing to do. So what pushed him over the edge was having the right formulation.
Q So the President wants to provide leadership in these regards, but wasn't it the Europeans and the British who took the lead over the weekend, doing the very same thing with --
MS. PERINO: They were able to move first because they were talking to their partners, but it was -- President Bush met on -- I'm not in a competition with the Europeans as to who was first or who wasn't. I'm not going to play the game either, because I think that all of the leaders would say that the amount of coordination and cooperation amongst them is at a level unprecedented, and a very good cooperative tone has been struck.
So -- hold on please. I lost my train of thought, sorry.
Q About the tone struck, okay.
MS. PERINO: I'm sure it was brilliant. (Laughter.)
Q I'm so sorry, I'm quite sure it was. Two things. You said -- answering Ann's question, you said there would be a quarterly dividend. One thing that we've found in the last few months, nothing is guaranteed. What is the guarantee and what are the contingency plans in case this does not happen as planned?
MS. PERINO: I'll refer you to the Treasury Department. As I understand it, there's a guaranteed 5 percent dividend for the first three years.
Q What guarantees it, though?
MS. PERINO: I don't know. You'll have to -- you'll have to connect with them, they're the ones who have worked out the agreements with the banks.
Q Okay. And then also, you said this was done in an expeditious fashion for Washington, in 11 days. What things were put on the back burner to make this happen? I mean, you know, this is the White House; things happen all around the world, you got your hands on everything, but something had to be pulled back or delegated somewhere else.
MS. PERINO: At the White House you don't have the luxury of even having a back burner.
Q I don't understand why President Bush excluded Greece from visa waiver program.
MS. PERINO: Why did he exclude Greece? I don't know, we'll check -- I'd have you check with the State Department.
Q No, they said I have to check here because --
MS. PERINO: Oh, really? They're playing that game? I'll check for you. I didn't come prepared with my Greece visa waiver points.
Q Dana, you said that some were for the capital injection in the beginning of these negotiations. Can you describe the President's feelings about that from the beginning and whether this was a particularly difficult move for him to make to go --
MS. PERINO: I don't think the President necessarily weighed in with an opinion either way. He was listening to his experts and he was directing them to ask the tough questions and make sure that they found the right tools. But he was glad that the rescue package -- and he insisted on the rescue package having the flexibility so that as this dynamic situation evolved they would be able to address it with the tools that they had. So that's what the rescue package provides. But I don't remember him ever saying specifically in meetings that I had, but just asking a lot of questions to make sure that they were going to prescribe the right remedy for the illness that we had.
Q Dana, yes, thank you. Two questions. House Minority Leader John Boehner said, "The latest allegations of voter registration fraud by ACORN are further evidence that this group cannot be trusted with another dollar of taxpayers' money." And my question: Does the President agree or disagree with Mr. Boehner?
MS. PERINO: I don't know anything -- I don't have specific information about that group. But what I can tell you is that the integrity of the vote is essential to our democracy. And the Justice Department investigates where needed, but they don't comment on those investigations, and I can't either.
Q Okay. ABC reports that despite pledges by President Bush and American officials to the contrary, hundreds of U.S. citizens overseas have been eavesdropped on as they telephone friends and family back home, according to two former military and intercept operators at the NSA center in Port Gordon, Georgia. And my question: Does the White House dispute or admit this ABC report?
MS. PERINO: I don't have facts on that in terms of what the NSA would or would not have done. But what I can tell you is that the tools that we have should always be used appropriately and lawfully, and if there was misconduct it should be investigated.
Q One follow-up on the calls from this morning with the European leaders. Did the subject of an emergency G7-G8 meeting come up? Or is that now off the table at this stage since --
MS. PERINO: No one has ever said it's off the table, but we don't have a definitive date. I think that in the future we'll see if we can pull something together like that, but right now everybody has been very focused on the immediate issues at hand. The President remains open to meeting at a head-of-state level.
Q Thank you.
MS. PERINO: I have one more from Olivier -- sorry.
Q That actually was the question I was going to ask. Thank you.
MS. PERINO: Brilliant. (Laughter.)
END 11:34 A.M. EDT